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HMRC internal manual

Capital Gains Manual

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HM Revenue & Customs
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Debts not debts on a security: settled property when created

TCGA92/S251 (5)

TCGA92/S251 (5) extends the effect of TCGA92/S251 (1) where

  • the original creditor was a trustee, and
  • the debt, when created, was settled property, see CG33230.

In these cases, no chargeable gain will accrue on a disposal of the debt by any person who became absolutely entitled to the debt, when it ceased to be settled property, or by that person’s personal representative or legatee.

The restriction on losses on disposals where subsequent holders of the debt were connected with the original creditor, see CG53481, is also extended to cover cases where the debt was acquired from the person becoming absolutely entitled to the debt, or from that person’s personal representative or legatee.